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CIOManaged services and strategic outcomesIT departments utilize managed services to reinvent themselves, regain control over their technology infrastructure,
and refocus their efforts on achieving strategic goals.
By Jeffrey Bannister, Contributor, CIO
Executive Vice President, Global Enterprise Services, NTT America

Given that ‘managed services’ can mean so many things to so many people, let’s dispense with the term for a moment and ask something more fundamental: What is the basic task that corporate IT leaders are trying to accomplish with their infrastructure?

What is the purpose of all their servers, routers, firewalls, connectivity, cabling, software, applications, data centers, cloud computing, virtual instances, and more? As that mix of technologies has changed over the years, so has the answer. Once serving as the sole provider of internal technology resources, IT departments are now exposed to competition from external providers. Once deemed a cost center, if not a money pit, they are looking to reframe their impact on the business as accretive, not dilutive. Once (and still often the case) hampered by multi-year investment cycles, they are looking for the latest tools and techniques to address the specific business challenges of today.

Cloud vs. on-premises security

That is a fairly simplistic example, involving small amounts of data and limited risk. As we have discovered at many customer sites, however, these kinds of cases are replicated many times, and at large scale. Use of these cloud-based systems and platforms without explicit organizational approval, also known as shadow IT, is widespread. While it can help employees and departments solve pressing problems, it poses real risks of its own.

Even with cloud services and infrastructure that have been fully vetted, the question remains: Are cloud solutions as secure as solutions hosted on an organization’s own premises? The industry appears to be split on an answer.

Each side has proof points. Cloud skeptics can point back to the hack of a high-profile online storage firm or the fatal DDoS attack on a hosting company. Cloud proponents may recall the attack on the point-of-sale (POS) network of a large retailer and the hack of one of the largest U.S. health insurance providers. There is no definitive score on the total number of compromised accounts in cloud vs. on-premises networks.

The paradox of IT

In the context of these shifts, managed services begins to make sense. The old paradigm focused on physical assets, resources and staff. In the famous ‘pets vs. cattle’ metaphor, traditional IT looked after individual servers, much as one takes care of a pet dog or cat. The new model looks more toward results. The single cow, which can be replaced, is less important than the health of the herd.

Or to illustrate these approaches in another way, consider the outlooks of the oldest and youngest members in the workforce. For the Traditionalist, what was most important was owning things: a house, car, things in general. Generation Z, the youngest of the five working generations, on the other hand, is more likely to rent, buy transport ‘by the ride,’ and simply not be tied down by possessions.

The paradox is that to deliver on a more strategic outlook, IT leaders can no longer rely entirely upon internal resources (things). Achieving the right outcomes depends less upon making up-front investments than on forging relationships with external partners who can deliver the services required over time. Yet all cannot be outsourced. IT still retains overall responsibility for the data and information that may constitute a corporation’s most valuable asset. That is just one of several dilemmas created by the need to do more with less.

Strategic goals

Amidst this multi-sourced and hybrid landscape, how does IT maintain control? Or more immediately, how does IT regain control?

The loss of control has occurred alongside traditional IT constraints and the rise of third-party platforms, applications and services. And just as the younger generation tends to be footloose and asset-lite, so too they bring to work the idea that corporations should operate similarly. Having grown up as digital natives, they also expect that organizations should be able to deliver as good or better IT services and SaaS tools as they can obtain on their own; and if not, then they should be free to obtain them on their own.

With Millennials now making up the largest generational group in the workforce, this perspective is becoming mainstream, with corporate departments adopting pay-as-you-go cloud-based CRM, collaborative tools, external storage and other infrastructure beyond the purview of traditional IT. In so doing, they are creating another bank of Shadow IT, with the coincident risks and benefits that give rise to a range of sometimes competing goals:

Control. The goal is not to dictate, but rather to exercise oversight. Fully informed of how an organization is using internal and external resources, IT departments can set standards, eliminate redundancy and waste, enhance security and otherwise rationalize these assets.

Choice. Outlawing Shadow IT or competitive third-party providers would eliminate their benefits. Those include an orientation toward discrete tasks, a wide range of functionalities and performance, and reduced costs engendered by competition.

Simplicity. The wide range of cloud-based solutions and applications creates a potential management nightmare that could lead CIOs into wishing that Shadow IT remained in the shadows. The ideal is a single-pane-of-glass view of all internal and external assets.

Cost efficiency. Driven by software and COTS servers, lower cost structures are baked into the cloud value proposition. Higher utilization rates of shared resources also create more efficiency, although matching workflows with the hybrid sourcing approach (public, private, on/off prem, degree of virtualization) is also critical. (See Figure 1.)

Strategy. Knowing what is strategic is a key part of the matrix depicted in Figure 1. With a keen sense of what delivers high business value, CIOs should be able to match the most valuable internal resources with those efforts directed toward sustainable competitive advantages.

CIO

Managed services

For many years, corporate IT has worked with managed service providers. A common model was to set up massive outsourcing agreements that threw bodies or hardware at a problem.

That resource-heavy scenario persists. In a recent engagement, a highly promising biotech spin-off, starting anew with no ICT infrastructure, was considering a CapEx-intensive solution when NTT Com met with the virtual startup and changed the conversation from hardware investment to managed services and outsourced infrastructure. The firm quickly realized that an elastic infrastructure-on-demand approach was much better calibrated for their situation.

As a managed service provider, NTT Com offers four primary practices: cloud migration assistance, remote infrastructure management, application management and application life-cycle management. At its heart is a cloud management platform that not only includes management functionalities, but also enables discovery of resources and provides visibility required by IT directors, business leaders and security professionals.

As befits a service provider with more than 140 data centers and network service in 196 countries, NTT Com supports its managed services platform with a multi-lingual, 24/7, multi-tiered global operations center staffed by personnel tasked with customer service awareness, technical and operational accountability and continuous service improvement.

Final recommendations

Whether partnering with NTT Com or not, IT departments aiming to reinvent themselves with managed services should try to keep it simple. To that end, allow me to offer five suggestions:

  1. 1. Audit your application estate. What do you have and why you do have it? How many duplicates are there? On how many separate cloud deployments? At what cost?
  2. 2. Start small, especially if you’re moving to cloud for the first time. If you have time, carve off some applications that free up team resources. Internal users dislike disruption, even if the change is for the better. Grow over time.
  3. 3. Define what you want. Focus on business outcome. Set up a measurable objective for the process. Then jointly invest in the outcome.
  4. 4. Be realistic about skills that are needed and available to support change. Managing the cloud involves new delivery models. Some automation is built in, but virtual devices still require configuration. If you don’t have the skills, find them. Focus on innovation; leave the plumbing for those who are good at that.
  5. 5. Ensure you have tools and systems to manage service quality. Where you once managed infrastructure, now you’re managing partners and the quality that they deliver.

Managed services are no panacea. Some workflows should, in fact, remain on legacy infrastructure. Moreover, in any strategic initiative, corporate personnel, culture, and other resources come into play as well. Yet when all those factors align, managed services are singularly positioned to help IT leaders accomplish the one overriding task facing them: how best to add value to the business.

Jeffrey Bannister, Contributor, CIO

Jeffrey Bannister is the Executive Vice President of Global Enterprise Services for NTT America, the U.S. division of NTT Communications.
With more than 25 years of IT services and telecommunications experience, Mr. Bannister is responsible for all facets of sales, operations, and business development, with particular focus on multinational corporations with headquarter operations in the U.S.

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